Just 14 per cent of divorce settlements include pension sharing provisions, often leaving women with “fewer financial resources for later life”, a major study has revealed.
The research, published by pension scheme provider Nest, highlights the growing “pension gap” between men and women.
According to the report, the average woman working full-time in the UK could have a £41,000 gender pension gap at retirement, increasing to £72,500 when including women working part-time.
While this is partly due to systematic issues – for example, more women work in lower-paid and part-time roles, meaning less cash is contributed to their pension pots – the authors also highlight the impact of divorce on women’s finances.
“Financial and parenting decisions are often made as a household, but when households break up, women are often left with fewer financial resources for later life. Women are also less likely to be planning for retirement,” said Nest.
For example, the study found that women are more likely than men to have only the basic state pension to survive on after divorce, with just 14 per cent of divorce settlements including pension sharing provisions.
Additionally, women who are divorced or separated from a partner were “more at risk” of financial hardship during the coronavirus pandemic. The report suggests that a third (34 per cent) of women were struggling to “make ends meet financially” compared to a quarter (25 per cent) of men.
The authors added: “Though it can be uncomfortable to do so, plan for adverse events such as relationship break-down, divorce or death and take action to ensure that each partner has a financial plan which will endure.”
For support and advice on related issues, please get in touch with our expert Family and Relationship team at Mackrell.Solicitors today.
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